Miscellaneous pictures and thoughts to wrap up the Shanghai series. These should be taken very lightly, based as they are on a big four days of jet-lagged reportage.

Aerial view near Shanghai

From the low approach into Shanghai airport.

It’s impossible not to be impressed. You look at the towers, and more springing up, and you realize the money didn’t come from what they pump out of the ground, but from building stuff for the rest of the world to use. Speaking as an investor, I’m trying to think of a way to bet a few bucks on China in general. The stock market and corruption and political threats have to scare you; maybe you could do worse than just buy a bunch of RMB and put them under your bed.

On Biz · Going over and back, I sat next to a Canadian businessperson on a trip to work with Chinese colleagues. In both cases, things were going well, although there was a continuous fight with quality problems, with cultural gaps, and with workforce retention. Even the bright-faced happy-news English city paper had a story one morning about how people in white-collar jobs stay at each one for an average of less than two years. One reason, I suspect, is that most businesses don’t give the most rewarding and exciting work to the Chinese end of their operation.

The big mall in Pudong, Shanghai

Inside the big mall in Pudong.

Pardon me, I’m just a country boy from Alberta, but I can’t help feeling some cognitive dissonance; on one side all this free-enterprise energy and on the other its context, which is, after all, a Stalinist dictatorship; the big Party Congress wrapped up while I was there and I watched on TV as Mr. Hu trotted out his new front bench; they formed a rigid line in identical dark suits, red ties, and poker faces. Spookily just like they used to line up on the podium in Red Square in Moscow.

I found people remarkably free in talking about politics. Mostly I talked to geeks, of course; they laughed at the Great Firewall (finding a proxy to get around it is no big deal) but were livid with fury about how if you want to put up a web-site, you have to get approval from three different ministries, and then you might get a call from another saying “You need our approval too”.

I don’t know, doesn’t seem tenable to me in the long term.

There was a kind of strange article in The Economist recently, A workers’ manifesto for China. I’ll quote: “It is widely agreed that China needs to rebalance its economy in favour of consumption and away from exports.” I won’t reproduce the arguments but they’re sensible.

There follows a lot of analysis which twists this way and that to avoid its own obvious conclusion: they need to pay people better. What China actually needs is some decent labour laws and bloody-minded unions to drive up wages so that people will have some RMB in their pockets and you can get some of that consumption happening, and then some human-intensive service industries. That sector doesn’t really start to happen until you’ve got the basics of life and you can start to splurge on counselors and hairdressers and auto tuners and wedding planners and brewpub operators and yoga instructors and so on. I’d say what China needs (and I know this is going to sound weird) is a little more, um, socialism. This, of course, is a conclusion that the Economist is institutionally incapable of coming to; even though their headline-writer did.

On Culture · China exports computers and dolls and toasters and transformers and Transformers and tables and chairs and shirts and skirts. But it doesn’t export any culture. North America and Japan and Britain and France and Germany and Italy export rock & roll and Pokemon and Harry Potter and fine cuisine and automotive design and opera singers. I haven’t the faintest kind of idea what kind of culture China is going to export once it grows up a little more and figures out what it wants to be.

Sign: Tower of Happiness, Hall of Mildness

China, bearing in mind that dictatorship thing, is amazingly open. When I stopped by the bank machine in the airport for some RMB, the dialogue was in a language somewhat but not completely unlike English, opening with “Please dip your card” and continuing in a slightly-crazed but cheery conversational tone in which the machine referred to itself as “I”.

But hey, it worked fine, and someone obviously hadn’t stressed out about the finer points, they’d pulled it together with the English they had, and I got my money, and then I went and spent a bunch of it. This is an attitude I respect.

The Huangpu river curves between Shanghai and Pudong, and there are boats moving the things China makes, and whatever it makes them out of, going up and down it all the time. Also a few party boats, and also billboard boats, with these huge neon pixel-boards lit up with advertising. Here’s a shot through the thick, tinted, not-so-clean window of my hotel rom.

Video advertising billboard boat on the Huangpu in Shanghai

There are political and business issues to sort out, for sure, but there’s a lot of imagination waiting to happen.



Contributions

Comment feed for ongoing:Comments feed

From: denis bider (Nov 05 2007, at 16:47)

We live in an upside down world where the truly capitalist countries are the "communist" ones (China, Russia) and the truly socialist countries are the "capitalist" ones (US, EU, Australia). The countries emerging from communism are recognizing from their own historical experience that capitalist attitudes are what's necessary to drive economic growth. Meanwhile, the "capitalist" countries succumb to envy-based instincts of their voters, taxing money away from capital and transfering it where it's used for immediate spending, thereby slowing growth.

What you propose - China needing more "socialism" - in fact amounts to what one might call "stealing from the future".

If things remain as they are and the Chinese GDP continues to grow at 8%, and let's suppose that inequalities (that which is considered "unfair") also increase and that wages grow only at 6% annually, then the Chinese wage worker will have a purchasing power twice that of today in 12 years, and four times today's amount in 24 years.

If, on the other hand, China adopts more "socialist" policies as you propose, mandating an immediate 50% increase in wages, this will indeed facilitate the development of spas and hairdressers and so on which you herald as representative of a more developed economy - but this forced redirection of resources from investment to immediate spending will also result in a slowing growth to levels similar to those in the United States or Europe. Supposing growth slows to 3%, this means that the well-being of Chinese people will from then on be forever trapped in a lag of several decades behind the United States. Furthermore, at the 3% growth level, despite the 50% immediate boost, the purchasing power of the Chinese in 2020 will be the same as with 6% growth without the immediate boost; and most importantly, their purchasing power in 2040 would be two times lower than with 6% growth and no immediate boost.

The Economist has good reasons for not jumping to naive conclusions. The headline writer's job is to attract attention. The newswriter's job is to relay information, not to encourage policies that will be harmful in the long-term - as if economic illiteracy among politicians isn't bad enough already, without yet another media outlet egging them on.

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From: Giles (Nov 05 2007, at 17:00)

That last photo appears to be something straight out of the opening scenes of Blade Runner.

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From: Joe Slag (Nov 06 2007, at 07:18)

Living in the northeast US, I see plenty of Chinese food (varying levels of authenticity); traditional medicine including acupuncture, acupressure, and herbs; and martial arts. These are all cultural practices that go way back, and often get here by way of Taiwan, but they're definitely Chinese.

Maybe the question is how much "new" cultural material is making its way out? Chinese cinema has certainly been making a big international impact of late.

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From: will (Nov 06 2007, at 09:47)

I don't know Denis... I'd describe your point as being that the future should steal from the present. You're suggesting that present day Chinese workers should accept a lower standard of living so that twenty years from now, their standard of living will be higher. I'm sure that looks good when you line it up on a spreadsheet, but that's twenty years of lost living. Unless you're going to expand everyone's lifespans by twenty years at the same time, I'm not sure it's the best bargain. In any case, no country can sustain the sort of growth that they have indefinitely. Eventually, social forces will push up the wages and things will cool down. This is the way that it works. And despite all the grousing about the perilous creep of "socialism" into capitalist countries like the U.S. (where I live), I don't see any shortage of money being made here.

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